A top Chinese technology executive is facing fraud charges in the United States connected to business dealings with Iran, a Canadian prosecutor said Friday.

Meng Wanzhou, chief financial officer of Huawei Technologies – China's largest telecommunications equipment maker – was arrested in Vancouver on Dec. 1 as she changed planes for Mexico. Canada's Justice Department said Meng, 46, who is the daughter of the company's founder, was detained due to a United States extradition request.

John Gibb-Carsley, a prosecutor for the Canadian government, says the U.S. alleges Huawei used a shell company to gain access to the Iran market in dealings that evaded U.S. sanctions, the Associated Press reported. He urged the court not to grant bail as Meng has incentive and means to flee Canada. Fraud charges in the U.S.could bring up to 30 years in prison, Gibb-Carsley said.

Meng assured U.S. banks that Huawei and the shell company alleged to have sold American-made components to Iran, called Skycom, were separate companies, but in fact are not, according to the Canadian prosecutor. Meng contends Huawei was sold to Skycom in 2009.

Influential state media linked to China's ruling Communist Party on Friday described Washington as a "despicable rogue" attempting to "stifle" China's global rise by arranging for Meng's arrest.

News of her arrest stoked fears that it could impact a trade war truce struck last week by President Trump and Chinese President Xi Jinping.

"There is ample evidence to suggest that no major Chinese company is independent of the Chinese government and Communist Party – and Huawei, which China’s government and military tout as a 'national champion,' is no exception," said Sen. Mark Warner, D-Va., in a statement. Warner said Huawei "poses a threat to our national security."

Ben Sasse, R.-Neb., called Meng an agent of China's Communist Party.

Huawei denied the accusation and state media came down firmly on its side.

The Global Times, an English-language tabloid published by China's Communist Party, said the incident illustrated a "U.S. tendency to abuse legal procedures to suppress China's high-tech enterprises." The paper noted that there was strong opposition to Meng's arrest by China's Embassy in Canada, which called her detention a "gross violation of human rights." It alleged that President Donald Trump's administration was maliciously "taking aim at the tech giant's global market in the name of the law."

China Daily, a separate Chinese government mouthpiece, claimed Meng's arrest proved "the U.S. is trying to do whatever it can to contain Huawei’s expansion in the world simply because the company is the point man for China’s competitive technology companies." It said it was an example of the U.S.'s "pertinacious Cold War mentality" toward China and relations between the two countries would suffer as a result.

Still, the harsh assessment from China's state media came in marked contrast to conciliatory comments from China's ministry of commerce, which signaled Beijing wanted to avoid the incident becoming an impediment to trade talks with Washington that could see them settle a dispute over billions of dollars of tariffs. A government statement simply requested the U.S. "correct its mistake" in calling for Meng's arrest.

On the U.S. side there was caution, too.

While Canadian authorities only revealed information about Meng's arrest on Wednesday, it actually took place on the same day Trump and China's President Xi Jinping held talks at the Group of 20 economic summit in Buenos Aires, Argentina. Trump's national security adviser John Bolton told National Public Radio on Thursday he wasn't aware in advance the arrest was taking place. He also said he didn’t know if Trump knew about Meng's pending detention before it happened.

The U.S. has yet to release an official statement related to Meng's detention.

Meng was expected to have a bail hearing in Canada on Friday.

The incident has alarmed financial markets. Stock indexes around the world sank on Thursday as investors fretted over how Meng's possible extradition to the U.S. would affect an already fragile U.S.-China relationship. Attempts to end the trade dispute between the world's two largest economies have been difficult and there are fears that China may aggressively retaliate against American executives and firms in China.

Trump and Xi agreed in Buenos Aires to a 90-day truce over additional tariffs.

"Every American firm that does business in China is vulnerable, because Chinese laws are extremely vague. There is no way to get official clarification. So people, in order to do business, have to work in that murky regulatory environment," Jeff Moon, a U.S. trade representative to China under President Barack Obama, told CNBC.

"The Chinese can crack down quite easily because those laws are vague and they can interpret them however they want," he added.

International experts believe China's emergence as a global economic power that intends to challenge for dominance in virtually every field from space exploration to military supremacy is one of the chief challenges facing the United States in the 21st century and beyond. China is now the world’s number one producer of undergraduates with science and engineering degrees, accounting for more than a quarter of all these degrees globally, according to the Bruegel think tank. Its military cyber-warfare units have carried out repeated attacks on American companies and government departments and have even reportedly tapped Trump's iPhone, a testament to its growing sophistication and prowess in digital surveillance. In his NPR interview, Bolton said Chinese firms like Huawei use stolen U.S. intellectual property, an allegation China has consistently denied and says is eroding trust between the two nations.